Introduction Many investors mistakenly believe that by registering a holding company in places like the Cayman Islands or British Virgin Islands (BVI), and then having this holding company own a Hong Kong licensed corporation (commonly known as Type 1, 4, or 9 license), they can bypass the major shareholder approval process of the Hong Kong…

Preface In Hong Kong’s financial market, licensed corporations (commonly known as Type 1, Type 4, and Type 9 licenses) are often viewed as assets with “built-in credibility” due to strict regulation by the Securities and Futures Commission (SFC). However, the SFC also maintains rigorous scrutiny over shareholding structures and major shareholders’ qualifications. As a result,…

Preface Besides the “334” strategy, many other “clever” approaches circulate in the market that attempt to avoid SFC approval for major shareholders, such as splitting shareholdings into numerous small portions below 10%, or diluting actual control through multiple layers of offshore companies. This article will explore several common cases and explain how these methods are…

Insurance Rebates: Compliance vs. Boundary-Pushing, Complete Guide I. Background and Limitations of Rebates In Hong Kong, regarding long-term insurance products (e.g., life insurance, savings with dividends, investment-linked insurance), the Insurance Authority (IA) has clear guidelines (e.g., GL25 – Guideline on Offering of Gifts) prohibiting unrecorded or under-the-table “money-giving” rebates. II. Common “Compliant Practices”: Transparent Approaches…

Insurance brokerage firms can legally give “rebates” to clients as long as they follow the law and regulatory requirements. The most important thing is to ensure the process is transparent, documented, and not done secretly. Here are three main approaches: 1. Using the Client’s Close Friends or Family as “Referrers” 2. Formally Documenting “Rebate” Terms…

In the insurance industry, especially in markets like Hong Kong and the U.S., two practices often spark debate: rebating and the involvement of unlicensed third parties. Rebating happens when brokers or agents offer customers a portion of the premium or commission as an incentive to buy insurance. Meanwhile, unlicensed third parties are people without proper…